SALES MANAGEMENT

The basic function and role of selling is to generate sales and earn revenue for the organisation.

Modern selling approach involves : Maintaining good customer relationship Managing profitability Managing customer complaints/ grievances Building brand equity

Sales Management is the marketing management activity dealing with planning, organising, directing and controlling the personal selling efforts.

Sales Management translates the marketing plan into marketing performance. It is the muscle behind marketing management.

SALES MANAGEMENT

Sales V/s Marketing

Sales Division Marketing Division

Forecasts potential sales volumes and prices incorporating marketing and promotional activities for existing and new products

Analyses user/ consumer needs in relation to market opportunities for new and existing products, their attributes and benefits

Develops sales force organisation and structure to achieve the planned forecasts and implement strategies

Develops marketing strategies and programmes, including advertising and promotional activity

Converts division plans and forecasts into specific sales targets, programmes and tactics for subordinate personnel

Conducts and commissions market research into aspects of existing and new products, incl. test marketing

SALES MANAGEMENT

Sales V/s Marketing

Sales Division Marketing Division

Emphasis is more on the product Emphasis is on the consumer needs and wants

Management is sales volume oriented Management is profit oriented

Planning is short-run, focusing on existing products and markets

Planning is long-run, looks at future markets and growth

Views business as a goods-producing process

Views business as a consumer satisfying process

Emphasis is on optimum utilisation of existing technology and reducing costs

Emphasis is on innovation, better value to customer thru superior technology

SALES MANAGEMENT

Factory Product Sales & Promotion

Profits thru sales

volumes

MarketCustomer

NeedsCoordinated

Marketing

Profits thru Customer

satisfaction

Selling Concept

Marketing Concept

Starting Point

Focus Means Ends

SALES MANAGEMENT

Tasks involved in Sales Management :

• Determine and achieve the firm’s personal selling objectives

• Formulate sales policies

• Structuring the sales force

• Deciding the size of the sales force

• Designing sales territories

• Sales forecasts and sales budgets

• Fix sales quotas/ targets for individual sales territories/ salesmen

• Creating and managing the sales force

Contd….

SALES MANAGEMENT

Tasks involved in Sales Management : - Contd.

• Managing the Marketing channels

• Ensuring growth and develop new accounts

• Sales communication & Reporting

• Sales coordination and control

• Build the sales organisation

• Assist the marketing management in product mix, pricing, distribution, advertising and sales promotion

• Create and maintain the right image for the company and its products

SALES MANAGEMENT

Formulating Sales Policies :

PRODUCT :

• Deciding the product line

• Whether product design or quality need to be modified

• Models, types/ size/ colour/ packing to be sold

• How product service is to be provided

• Kind of product guarantee are to be given

DISTRIBUTION :

• Channel design and types

• Channel remuneration, motivation & training

• Channel-principal relations

• Channel Costs

SALES MANAGEMENT

Formulating Sales Policies :

PRICING :

• Whether prices should match competition or be below / above competition

• Pricing method for each class of customer / order

• Discounts and rebates

• Terms of delivery and terms of payment

SALES MANAGEMENT

Personal Selling :

Oral Presentation in a conversation with one or more prospective purchasers for the purpose of making sales

- American Marketing Association

Selling activity of a salesman can be grouped under 3 heads :

1. Making Sales

2. Performing non-selling and service duties

3. A communication medium

SALES MANAGEMENT

Marketing Mix

Product Price Promotion Distribution

AdvertisingPublic

RelationsPersonal Selling

Sales promotion

Internet

Sales Management

Planning MotivatingBudgeting CompensatingRecruiting & Selecting Designing TerritoriesTraining Evaluating Performance

Positions of Personal Selling and Sales Management in the Marketing Mix

SALES MANAGEMENT

Tasks performed by Sales Person :

1. Prospecting – Searching for prospects or leads

2. Targeting – Allocating time/ prioritising among prospects and customers

3. Communicating – About the company’s products and services

4. Selling – Approaching, presenting, answering queries/ objections and closing sales.

5. Servicing – Technical assistance, consultation, finance arrangement, delivery etc.

6. Information – Market Research, field intelligence

SALES MANAGEMENT

SALES ORGANISATION : Is an organisation of individuals either working together for the marketing of products or services manufactured by an enterprise or the products procured for the purpose of re-selling. It is a structural body through which the functions of sales management are carried out.

A Sales Organisation defines the rules, roles, rights and responsibilities of sales-people engaged in selling activities meant for the effective execution of the sales function.

A successful Sales Organisation is one where the functions of each department are carefully planned and coordinated and the efforts of individuals are supervised.

SALES MANAGEMENT

A properly designed Sales Organisation increases managerial efficiency as it allows management to delegate routine jobs to lower levels and concentrate on strategic organisational planning and formulation of policies.

A good sales organisation always aims at achieving the sales target at minimum cost and with maximum efficiency.

A sound Sales Organisation coordinates the efforts of various departments, sections and employees for the attainment of common objectives.

A Sales Organisation makes continuous efforts to increase sales, thereby maximising profits and ensure growth.

SALES MANAGEMENT

Functions of Sales Organisation :

1) Administrative Functions : Formation of sales policy, designing the sales organisation structure, co-ordination of sales activities etc.

2) Operating functions : Performed by field sales managers and supervisors – include recruiting, training, routing, supervising and controlling the sales force.

3) Staff function : Providing support, sales planning, marketing research, sales analysis, sales personnel policies.

SALES MANAGEMENT

Factors influencing Sales Organisation structure :

1. Product / Service

3. Overall size of the company / Volume of business

4. Marketing Mix

5. Market Size (Present & Future)

7. Competition

2. Nature of Business (B2B, B2C, Manf. / Mktg./ Service)

6. Account Sizes (Key Accounts)

SALES MANAGEMENT

Geographical Structure

Sales Director

Area Sales Manager (South)

Area Sales Manager (North)

Area Sales Manager (West)

Sales Executives Sales ExecutivesSales Executives

Salespeople SalespeopleSalespeople

SALES MANAGEMENT

Product Specialisation Structure

Sales Director

Product Sales Managers

Fans Radiators Water Pumps

Salespeople SalespeopleSalespeople

SALES MANAGEMENT

Customer-Based Structure

Sales Director

Industry Sales Managers

Banking Manufacturing Retail

Salespeople Salespeople Salespeople

SALES MANAGEMENT

Functional Structure

Sales Director

Functional Managers

New Accounts

Customer Support

Distribution/ Logistics

Salespeople SalespeopleSalespeople

SALES MANAGEMENT

Emerging Trends in

Sales management

Technology

New Selling Methods

Relationship Selling

Customer Orientation

Global & Ethical Issues

Diversity

SALES MANAGEMENTRelationship Preferences :

Hunter Focussed on finding/ securing new business. Once a new customer has been secured, the Hunter prefers to hand off the customer to another salesperson (a Farmer/Account Manager) for ongoing service. The Hunter will then go pursue additional new business.

Farmer An Account Manager - does not secure many new customers. This sales role is focused on deepening and broadening existing customer relationships. When Farmers do secure new customers, it is often the result of referrals from existing customers.

Hybrid Can be successful in either a Hunter or Farmer role. They are effective at securing new business and deepening customer relationships. However, it is very rare for both relationship preferences to be completely equal.

Hybrid salespeople that prefer the Hunter role are likely to have more churn in their account bases and higher rates of new account signups. Hybrid salespeople that prefer the Farmer role will prospect effectively for a period of time. However, as soon as they have secured a sufficient number of accounts, they will happily focus their full attention on Farming these accounts.

SALES MANAGEMENTSELLING STYLES

Consultative : Have a talent for asking questions, picking out important pieces of information from the answers, identifying possible needs, and relating the needs to potential solutions.

Relationship : Build close, personal relationships with their prospects and customers. They win business by earning trust. They can be effective Hunters, but usually prefer to be Farmers.

Display : Usually work in department stores or similar environments. The goods they sell are on display, and customers come to them. Their primary responsibilities are answering customers' questions and processing orders.

Hard Closer : These salespeople are very aggressive and don't readily take "no" for an answer. They are much more interested in making sales than they are in building long-term relationships.

These selling styles are not mutually exclusive. It is entirely possible for an individual's selling style to include components from two or more of the above selling styles.

SALES MANAGEMENT

Factors Defining a Firm’s Sales Job

Nature of the customer :

Nature of the offering :

Target Market – whether vertical or horizontal, individuals, corporations, institutions or Govt., Level of organisation to be addressed etc.

Tangible or intangible, complex or simple, stand-alone or a package, size of the portfolio etc..

Sales Environment : Factories, office or home-based, personal communication or telecom/ correspondence etc.

Geography : Number and locations of salespersons, connectivity etc.

Sales styles : Consultative, Relationship, Display or Hard closing etc.

Marketing Preference : Expansion (New markets, new accounts), consolidation or both.

SALES MANAGEMENT

Factors Defining a Firm’s Sales Job

Sales Cycle : Frequency of opportunities to close sales

Prospecting : Whether prospects seek salespersons or otherwise

Administration : Which sales job functions require attention to detail? (eg. Forecasts, timely updates, sales strategies, regulatory compliance etc.)

Communication : Requirement of verbal and written communication skills, presentations, preparation of proposals, legal contracts etc.

Pre and Post-sales support : Support resources available, managing effectiveness

of salespeople,

Training : Kinds and levels of training provided to salespeople.

SALES MANAGEMENT

SALES CONTROL

Sales Control enables the Management ensure that all the personal selling objectives of the firm are achieved.

The control system is made up of the following Control Loop :

TARGET Action

Variance (Positive/ NegativeAction /

corrective steps

SALES MANAGEMENT

SALES CONTROL

Yardsticks for measuring Sales Performance

1. Sales Volume & Sales Growth

2. Individual product-share in total volume

3. Market Share

4. Profits

5. Selling Expenses

6. Key Accounts

7. New Accounts

8. Channel Expansion/ New Dealers

9. Receivables Control

10. Pre-Sales & After-Sales Service

11. Dealers/ Customers training

12. Market Intelligence